Faye borrowed $9600 at 8% per annum compound interest.caculate the interest on the loan for the first year.
8/100 × 9600/1 = 768
The question is Faye borrowed $9600 at 8% per annum compound interest.
I)calculate the interest on the loan for the first year.
A=P(1+r/k) nk
A=$9600(1+0.08/04)1*4
A=$9600(1+0.02)1*4
A=$9600(1.02)1*4
A=$9600(1.08243216)
A=$10391.34874
A=$10391.35(2 d.p)
CI=Amount-principal
=$10391.35-$9600
=$791.35
Was the rate stated as 8% per annum, compounded quarterly?
I would conclude that by looking at your solution.
IF so, then you are correct
To calculate the interest on the loan for the first year, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = final amount (principal + interest)
P = initial principal (the amount borrowed)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, Faye borrowed $9600 at an interest rate of 8% per annum, compounded annually. As we're only looking for the interest for the first year, t = 1.
Let's plug in the given values into the formula:
A = 9600(1 + 0.08/1)^(1*1)
Simplifying:
A = 9600(1 + 0.08)^1
A = 9600(1.08)
A = 10368
Now, to find the interest for the first year, we subtract the initial principal from the final amount:
Interest = A - P
Interest = 10368 - 9600
Interest = $768
Therefore, the interest on the loan for the first year is $768.